Together, the islands of St Kitts and Nevis offer a lot to the canny investor – not only low taxes and great property prices, but also citizenship, says tax expert Lee Hadnum

St Kitts and Nevis is a federation of two tiny volcanic islands in the eastern Caribbean with a population of just 43,000. The islands were discovered by Columbus in 1493 and settled by the British in the 17th century, finally becoming independent in 1983. The climate is tropical but with a steady cool breeze for most of the year. Crime is low and tends to be restricted to purse snatching and other petty offences.
The islands are a popular tourist destination, thanks to an abundance of pristine beaches. However, if you’re looking for a place to settle, you would have to get used to the isolation. There are very few shops and you would probably have to go to nearby St Martin to buy any luxury goods. St Kitts and Nevis levies import duties and the overall cost of living is high. Importing a car, for example, will set you back over 50% in import duties. The islands have good transport links, with flights to the UK and US as well as other key destinations. The main language is English. As for tax, St Kitts and Nevis is one of the ‘no-tax’ havens and is becoming increasingly popular for personal offshore tax planning. The islands offer good privacy protection (which is one of the reasons St Kitts is popular in asset protection strategies) and it doesn’t cost very much to set up an offshore company there.
There is no personal income tax, although domestic companies face a corporation tax rate of 35%. Although this is an extremely high tax rate, there is specific legislation that exempts offshore companies, as long as they only do business with non-residents. There is, however, a 10% withholding tax in operation for certain payments overseas.
If you work on the islands you also have to pay social security, but the rates are very low – just 5% of your monthly earnings up to an earnings ceiling of $6,500 per month. There is no capital gains tax on St Kitts and Nevis except when you sell local assets that you’ve owned for less than 12 months.
The fact that the islands are not a crown dependency may also be beneficial, as it means they are not subject to the EU Savings Tax Directive. This gives St Kitts an advantage over other UK dependencies in the Caribbean and over traditional UK offshore centres such as the Channel Islands. The island has agreed to implement the OECD Exchange of Information Treaty and to date has signed a number of such agreements.
If you want to invest in property you will have to obtain an Alien Land Holding Licence. There’s also stamp duty to pay and your total purchase costs could add an extra 15% to the price. Once a year the rental value of your property is assessed and a 5% house tax has to be paid on this rental value, although it’s unlikely you would ever end up paying more than $1,000. The good news is that all your rental income is tax free, and there is no capital gains tax unless you sell your property within one year.
Property is less expensive than on many other islands in the Caribbean. One-bedroom apartments start at £200,000 and stunning two-bedroom villas with spectacular views start at £370,000 in recently built complexes. If you’re not afraid to get your hands dirty, £557,000 can buy a large plantation house with grounds in need of complete renovation – a great investment opportunity.
If you want to obtain a residence permit you have to complete an application form that asks for some personal details and how you intend to support yourself while living there. You also have to submit evidence of your assets and a variety of other documents. For more information, visit the government’s website.
Another reason St Kitts and Nevis is so popular is that it effectively allows you to buy citizenship and a passport. There are a number of conditions that have to be satisfied (for example, they’ll want proof that you don’t have a criminal record). The most important requirement is that you invest at least $400,000 in ‘approved real estate’. The Government also requires a registration fee ($50,000 for the main applicant and a further $25,000 for your spouse and each child under 18).
If you want to establish permanent residence overseas quickly and perhaps even lose your UK domicile status, obtaining citizenship in St Kitts and Nevis may be useful.
www.stkittsnevis.org/visainfo
What’s Available
St Christopher Club
St Christopher Club is located in the heart of Frigate Bay, with easy access to coffee shops, hotels, golf course, casinos, restaurants, bars and both the Caribbean and Atlantic beaches. A newly-constructed ground floor apartment is available for $470,000.

The property qualifies for   economic citizenship and is divided into a one-bedroom, one-bathroom unit and a two-bedroom, one-bathroom unit. These individual units, intended for rental, can be accessed via a connecting door. The unit also features two covered verandas and is within minutes’ walk of the development’s communal pools, community centre, tennis court and the beach.
Contact: B Kassab & Assoc, tel: 001 869 466 6341
www.bkassab.com

Leeward Cove
Located close to Leeward Cove’s community tennis court, pool and  BBQ area, this turnkey upper unit   with a large loft is on the market for $495,000, has unrestricted views of the garden and is steps from the beach. Tastefully furnished, this        air-conditioned two-bedroom,         two-bathroom unit is completed with  a fully equipped kitchen and full size washer and dryer units in a separate laundry area.
A large loft area on the upper level offers space for a home office or a small guest bedroom and is cooled by air conditioning from the master bedroom. A large covered veranda overlooking the well-kept tropical gardens allow you to extend your living space to enjoy the tropical breezes. Each unit comes with a designated parking space.
Contact: B Kassab & Assoc, tel: 001 869 466 6341
www.bkassab.com

Half Moon Bay
This two level villa priced at $995,000 is ideally located on prestigious Half Moon Bay, offering sweeping views of the golf course and south-east peninsula. This home offers family flexibility across four bedrooms as well as entertaining space. Offered almost fully furnished, it exudes comfort and style. Additional items include hurricane shutters on all doors and windows, a new Italian-designed kitchen with upmarket appliances and granite countertops, a two-car garage and a hot tub on the veranda, which can easily be converted to a swimming pool.  
Contact: B Kassab & Assoc, tel: 001 869 466 6341
www.bkassab.com

Spring Hill Estate, Nevis
Down a private track from the main road, this retreat is situated on more than an acre of land in the residential community of Spring Hill Estate. The surrounding garden, landscaped with a variety of trees and plants, accentuates the feelings of privacy and intimacy. From the colorful veranda, facing west-north west, spectacular views of the Caribbean Sea and tropical sunsets are enjoyed. Built in the traditional Caribbean style, Banana Estate has two bedrooms. The interiors further complement the building style with vibrant colors, rich fabrics and carefully chosen pieces. The house is on the market for $595,000.
Contact: Nevis Style Realty,
Tel: 001 869 469 1120, www.nevisstylerealty.com

Fig Tree Lane, Nevis
This magnificent 4 acre property is located in the southwest of Nevis on the Stoney Grove Estate. Renovations were completed in 2009, including cypress wood and stone interiors, a copper sink and stove, Tibetan furniture and landscaping with over 60 palm trees. The property has three bedrooms and is on the market for $595,000.
Contact: Nevis Style Realty,
Tel: 001 869 469 1120, www.nevisstylerealty.com